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ANA Holdings' plan to launch a new low-cost carrier has doubters already, given the coronavirus pandemic’s impact on airlines worldwide and an industry trend toward retrenching. The company said Tuesday it will launch a new budget brand around fiscal year 2022, targeting medium-distance flights to Southeast Asia and Oceania. That coincided with the carrier unveiling a restructuring plan involving cost reductions and halted plane orders. “There are significant risks over whether this can be a success,” Goldman Sachs Group Inc. analysts including Ben Hartwright said in a report Wednesday. There have been few successful regional carriers and the launch of the new brand may impact ANA’s cost efficiencies and add complexities to its operation, the analysts said. The carrier is predicting its biggest-ever operating loss of Y505b ($4.8b) for this fiscal year as the pandemic decimates demand. James Teo, an analyst at Bloomberg Intelligence, said it may not be a good time for ANA to launch a new brand given the investment it requires. ANA will try to prevent the new brand from cannibalizing the business of its existing budget carrier, Peach Aviation Ltd., President Shinya Katanozaka said at a news conference.<br/>

Avianca Holdings and 450 pilots from the Colombian Association of Civil Aviators (ACDAC) reached an agreement on Wednesday that cuts worker pay but delivers job security for the next four years. Colombia’s flagship airline, which has more than 1,200 pilots in total, is continuing negotiations with other unions as it seeks to pull through the industry crisis sparked by the coronavirus pandemic. The ACDAC agreement included postponing some economic benefits for four years from the start of 2021, a 15% cut to wages and bonuses, a guarantee for minimum pay and annual salary increases of 2% or at inflation, whichever is higher. Avianca Holdings CEO Anko van der Werff said both sides had the “common goal of supporting the airline to come out of this crisis as a stronger company,” adding he hoped to reach similar agreements with other unions. Avianca, which entered a restructuring process under US bankruptcy law in May, has gradually restarted its operations after quarantine measures to control the spread of coronavirus in Colombia and other Latin American countries where it operates were lifted. <br/>

South Africa’s National Treasury has defended a controversial 10.5b rand ($641m) lifeline for its bankrupt national airline, saying that setting it on the path to recovery will entice private shareholders. “Government is not going to want to hold on to South African Airways at all costs,” Treasury Director-General Dondo Mogajane said after the bailout was announced on Wednesday. “If that means giving up the majority shareholding, that will happen.” While the airline hasn’t made a profit for almost a decade and has long relied on state support to fly planes, administrators appointed late last year have a produced a viable rescue plan, Mogajane said. If it can be implemented, as many as five potential strategic-equity partners are waiting in the wings, he said, without naming them. “Most of them are saying fix the old, pay off the debt -- and then we will come on,” Mogajane said. The claim that a number of private investors are queuing up to take responsibility for SAA is a familiar one, having been made repeatedly this year by Public Enterprises Minister Pravin Gordhan and his department, the most vocal supporters of the airline’s rescue. Yet so far, the only potential backer to officially come forward has been Ethiopian Airlines Group, Africa’s biggest carrier, which made clear it was interested in an operational role rather than providing cash. SAA is too important for the local aviation market to fail, said Mogajane. The cash will be used for worker-severance packages and ticket refunds as well as basic startup costs, according to the rescue plan published in June, and come from government departments including education, police and health.<br/>

Air NZ is making hundreds of its remaining cabin crew members redundant as the COVID-19 pandemic rages on. "It's heartbreaking. It's basically everyone with under 25 years of service, gone," one crew member who had just been told the news said. On top of the 385 staff who were given notice in September, Air NZ has confirmed it's ending a furlough arrangement it had in place with 550 cabin crew. Staff were given a timeline of when any changes would take place. Documents say that feedback from both unions and employers would be considered up until October 14 and that in the week of October 27, the airline would "notify impacted employees". Staff were informed as part of the consultation process that any crew who were employed after the Multi-Union Collective Agreement (MUCA) would be made compulsorily redundant, while those on older, pre-MUCA contracts would essentially be made redundant on a 'last on, first off' basis. The airline has confirmed that around 4000 employees have lost their roles since the start of COVID-19, a figure which includes the 550 international cabin crew on furlough. Air NZ's COO Carrie Hurihanganui said September's schedule reductions as a result of a decline in passenger demand on international routes, meant the airline had to look at reducing its number of employees. "Air New Zealand entered into consultation with the remaining international cabin crew around further reductions. Our international schedule remains largely limited by border restrictions and unfortunately there is not enough flying to provide sustainable rosters for the number of international cabin crew we have," Hurihanganui said. "That consultation has now completed and we have confirmed we will be going ahead with the reduction of around 385 full time equivalent roles."<br/>

Suppliers such as aircraft manufacturers, lessors and MRO providers must make a greater contribution to shouldering the financial risk borne by airlines amid the air transport crisis, in the view of LOT COO Maciej Wilk. “What we see today is that airlines are begging their states for support, and this money will not only be used for the airlines to survive,” said Wilk. “This money will deliver revenue to the whole industry.” He argues that while airlines have been immediately affected by the decline in travel demand, suppliers have been “protected” by contractual clauses in service agreements and – thanks to higher profit margins than airlines before the crisis – larger cash reserves. “It cannot be like this anymore in the future that MROs, OEMs, lessors, all other parties are protected… from all the risk,” he adds. “It must not only be airlines that carry the ultimate cost of the crisis… The whole risk in the industry must be rebalanced. We are all in this together, and all of us must contribute to getting out of this crisis.” Wilk predicts an “extremely difficult” winter season, as the Polish flag carrier does not expect recovery in demand before April 2021. When airlines started to ground fleets amid the coronavirus outbreak across Europe in March, he says, LOT’s leadership foresaw straight away that the crisis would last at least a year. He foresees that even if demand recovers, airlines will struggle to deliver profits as ticket prices will be under pressure amid “enormous overcapacity” in the market. “If airlines collapse then it’s game over for everyone,” he warns, recapitulating his argument. “It is really high time for all of us in the industry to contribute.”<br/>